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EXHIBIT 10.2
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STOCKHOLDERS AGREEMENT
By and Among
Private Business, Inc.,
The Stockholders as defined herein
and
The Investors
as defined herein
Dated as of August 7, 1998
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS.........................................................................................1
Section 1.1 Construction of Terms..................................................................1
Section 1.2 Terms Not Defined......................................................................1
Section 1.3 Number of Shares of Stock..............................................................1
Section 1.4 Defined Terms..........................................................................2
ARTICLE II RESTRICTIONS ON TRANSFER AND CO-SALE PROVISIONS....................................................3
Section 2.1 General Restriction....................................................................3
Section 2.2 Co-Sale Procedure......................................................................4
Section 2.3 Drag-Along Obligations.................................................................5
Section 2.4 Assignment.............................................................................6
ARTICLE III RIGHTS TO PURCHASE................................................................................6
Section 3.1 Right to Participate in Certain Sales of Additional Securities.........................6
Section 3.2 Assignment of Rights...................................................................7
ARTICLE IV ELECTION OF DIRECTORS..............................................................................7
Section 4.1 Board Composition......................................................................7
Section 4.2 Removal; Vacancies.....................................................................9
Section 4.3 Committees of the Board................................................................9
Section 4.4 Irrevocable Proxy......................................................................9
Section 4.5 Assignment............................................................................10
ARTICLE IV.A CERTAIN TRANSACTIONS............................................................................10
Section 4A.1 Restrictions on Certain Affiliated Transactions and Arrangements......................10
ARTICLE V MISCELLANEOUS PROVISIONS...........................................................................10
Section 5.1 Survival of Covenants.................................................................10
Section 5.2 Legend on Securities..................................................................11
Section 5.3 Amendment and Waiver..................................................................11
Section 5.4 Notices...............................................................................12
Section 5.5 Headings..............................................................................13
Section 5.6 Counterparts..........................................................................13
Section 5.7 Remedies; Severability................................................................13
Section 5.8 Entire Agreement......................................................................14
Section 5.9 Adjustments...........................................................................14
Section 5.10 Law Governing.........................................................................14
Section 5.11 Successors and Assigns................................................................14
Section 5.12 Dispute Resolution....................................................................14
Section 5.13 Term..................................................................................15
Exhibit A - Form of Joinder Agreement
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STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT is made as of this ____ day of August 1998
by and among Private Business, Inc., a Tennessee corporation (the "Company"),
the founding stockholders of the Company identified as such on the signature
pages hereto (the "Founding Stockholders"), the persons identified on the
signature pages hereto as the Investors (each, an "Investor" and collectively,
the "Investors"), and any other stockholder or optionholder who from time to
time becomes party to this Agreement by execution of a Joinder Agreement in
substantially the form attached hereto as Exhibit A (the "Other Stockholders").
The Founding Stockholders and the Other Stockholders are herein referred to
collectively as the "Stockholders" and individually as a "Stockholder."
WHEREAS, reference is made to the Stock Purchase Agreement, dated as of
July 24, 1998, by and among the Company, the Founding Stockholders and the
Investors (the "Purchase Agreement"), pursuant to which the Investors have
agreed to purchase shares of Series A Convertible Preferred Stock, without par
value per share, of the Company (the "Preferred Stock");
WHEREAS, the Preferred Stock is convertible into shares of Common
Stock;
WHEREAS, the execution and delivery of this Agreement is a condition
precedent to the transactions contemplated by the Purchase Agreement; and
WHEREAS, the parties hereto desire to agree upon the terms upon which
the outstanding securities of the Company, now or hereafter outstanding and held
by them will be held, transferred and voted.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter set forth, the parties hereto agree as
follows:
ARTICLE I DEFINITIONS
SECTION 1.1 CONSTRUCTION OF TERMS. As used herein, the masculine,
feminine or neuter gender, and the singular or plural number, shall be deemed to
be or to include the other genders or number, as the case may be, whenever the
context so indicates or requires.
SECTION 1.2 TERMS NOT DEFINED. Capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to them in the Purchase
Agreement.
SECTION 1.3 NUMBER OF SHARES OF STOCK. Whenever any provision of this
Agreement calls for any calculation based on a number of shares of capital stock
held by a
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Stockholder or an Investor, the number of Shares deemed to be held by that
Stockholder or Investor shall be the total number of shares of Common Stock then
owned by the Stockholder or Investor, plus the total number of shares of Common
Stock issuable upon the conversion of any Preferred Stock or other convertible
securities or the exercise of any vested options, warrants or subscription
rights then owned by such Stockholder or Investor.
SECTION 1.4 DEFINED TERMS. The following capitalized terms, as used in
this Agreement, shall have the meanings set forth below.
An "AFFILIATE" of any Person means a Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by or is
under common control with the first mentioned Person. A Person shall be deemed
to control another Person if such first Person possesses directly or indirectly
the power to direct, or cause the direction of, the management and policies of
the second Person, whether through the ownership of voting securities, by
contract or otherwise.
"BOARD OF DIRECTORS" means the Board of Directors of the Company.
"COMMON STOCK" means the Common Stock, without par value of the Company
and any other common equity securities issued by the Company, and any other
shares of stock issued or issuable with respect thereto (whether by way of a
stock dividend or stock split or in exchange for or upon conversion of such
shares or otherwise in connection with a combination of shares,
recapitalization, merger, consolidation or other corporate reorganization).
"COMPANY" shall refer to the Company and any successor or successors
thereto.
"PERSON" means an individual, a corporation, an association, a
partnership, an estate, a trust, and any other entity or organization,
governmental or otherwise.
"PREFERRED STOCK" means the Preferred Stock, together with any shares
issued or issuable with respect thereto (whether by way of a stock dividend or
stock split or in exchange for or in replacement of such shares or otherwise in
connection with a combination of shares, recapitalization, merger, consolidation
or other corporate reorganization).
"QUALIFIED PUBLIC OFFERING" has the meaning set forth in Section A.6(b)
of Article IV of the Company's Amended and Restated Charter in effect as of the
date hereof.
"SHARES" means (i) with respect to the Investors, the shares of Common
Stock subject to acquisition upon the conversion of the Preferred Stock at the
relevant time (such number being subject to possible adjustment in accordance
with the terms of the Company's charter), or the shares of Common Stock held by
the Investors at the relevant time if conversion of the Preferred Stock has then
occurred, (ii) with respect to the Stockholders or any Permitted Transferee (as
defined in Section 2.1(b) below) thereof, all shares of Common Stock then held
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by the Stockholders and any Permitted Transferees thereof, and (iii) any other
equity securities now or hereafter issued by the Company, together with any
options thereon and any other shares of stock issued or issuable with respect
thereto (whether by way of a stock dividend, stock split or in exchange for or
upon conversion of such shares or otherwise in connection with a combination of
shares, recapitalization, merger, consolidation or other corporate
reorganization).
"TRANSFER" means any direct or indirect transfer, donation, sale,
assignment, pledge, hypothecation, grant of a security interest in or other
disposal or attempted disposal of all or any portion of a security or of any
rights. "Transferred" means the accomplishment of a Transfer, and "Transferee"
means the recipient of a Transfer.
"TWO THIRDS INTEREST" means the Investors holding not less than
two-thirds of the outstanding Shares held by all the Investors.
ARTICLE II RESTRICTIONS ON TRANSFER AND CO-SALE PROVISIONS
Notwithstanding anything herein to the contrary, the following
provisions of this Section 2 shall terminate immediately prior to the closing of
a Qualified Public Offering and shall not apply with respect to any Qualified
Public Offering.
SECTION 2.1 GENERAL RESTRICTION.
(a) Each Stockholder agrees that neither he nor his
Permitted Transferees as contemplated by Section 2.1(b) below will directly or
indirectly Transfer all or any portion of the Shares now owned or hereafter
acquired by any of them, except in bona fide sales to third parties for value
following compliance with Section 2.2 or to Permitted Transferees as permitted
by Section 2.1(b) (hereinafter "Permitted Transfers").
(b) Permitted Transfers by a Stockholder shall
include only Transfers (i) to a spouse or children (including adopted children)
or to a trust of which he is the settlor or a trustee for the benefit of a
spouse or children (including adopted children) and (ii) Transfers upon death to
such Stockholder's heirs, executors or administrators or to a trust under his
will or to his or her guardian or conservator (any permitted transferee
described in the preceding clause (i) or this clause (ii) being referred to
herein as a "Permitted Transferee"); provided that in any such case the
Transferee shall have entered into an enforceable written agreement providing
that all Shares so Transferred shall continue to be subject to all provisions of
this Agreement as if such Shares were still held by such Stockholder. Anything
to the contrary in this Agreement notwithstanding, Permitted Transferees shall
take any shares so transferred subject to all provisions of this Agreement as if
such shares were still held by such Stockholder, whether or not they so agree
with the transferor and/or the Company. Notwithstanding the foregoing, Permitted
Transferees shall not Transfer any shares other than
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to a Permitted Transferee of a Stockholder without compliance with Sections 2.2.
Without limitation of the foregoing, in connection with any otherwise permitted
Transfer of shares of capital stock that are restricted shares and are subject
to any stock restriction agreement, any transferee of any such shares shall
agree in writing to be bound by the terms of any such stock restriction or
similar agreement, including, without limitation, any repurchase or similar
right contained therein.
SECTION 2.2 CO-SALE PROCEDURE.
(a) In the event any Stockholder or any Permitted
Transferee under Section 2.1(b) proposes to sell any Shares, such Stockholder
may Transfer the Shares subject thereto only following compliance with this
Section 2.2. In such event, such Stockholder shall give prompt written notice of
the proposed sale to the Investors, which shall identify the proposed
Transferee, the number of Shares proposed to be sold and the terms of the
proposed transaction (the "Co-Sale Notice"). Each of the Investors thereupon
shall have the right, exercisable upon written notice to such Stockholder or any
such Permitted Transferee within 20 days after delivery to it of the Co-Sale
Notice (the "Co-Sale Notice Period"), to participate in the sale on the terms
and conditions stated in the Co-Sale Notice, except that any Investor who holds
Preferred Stock shall be permitted to sell to the relevant purchaser shares of
Preferred Stock or Common Stock acquired upon conversion thereof. Each of the
Investors shall have the right to sell all or any portion of its shares of
capital stock of the Company on the terms and conditions in the Co-Sale Notice
(subject to the foregoing), with the maximum number of shares equal to the
product obtained by multiplying the number of shares proposed to be sold by such
Stockholder or any Permitted Transferees as described in the Co-Sale Notice by a
fraction, the numerator of which is the number of Shares owned by such Investor
on the date of the Co-Sale Notice, as the case may be, and the denominator of
which is the sum of the number of Shares owned by such Stockholder or Permitted
Transferees and the number of Shares owned by all of the Investors (including
all assignees of the Investors), as of the date of the Co-Sale Notice. To the
extent one or more Investors elect not to sell the full amount of shares which
they are entitled to sell pursuant to this Section 2.2(a), the other
participating Investors' rights to sell shares of capital stock of the Company
shall be increased proportionately to their relative holdings of such shares,
such that the Investors shall have the right to sell the full number of shares
allocable to them in any transaction subject to this Section 2.2(a) even if some
Investors elect not to participate. Within five days after the expiration of the
Co-Sale Notice Period, such Stockholder or Permitted Transferee shall notify
each participating Investor of the number of shares held by such Investor that
will be included in the sale and the date on which the sale will be consummated,
which shall be no later than the later of (i) 30 days after the delivery of the
Co-Sale Notice and (ii) the satisfaction of all governmental approval
requirements, if any. Each of the Investors may effect its participation in any
sale hereunder by delivery to the purchaser, or to such Stockholder or Permitted
Transferee for Transfer to the purchaser, of one or more instruments,
certificates and/or option agreements, properly endorsed for transfer,
representing the shares it elects to sell therein, provided that no Investor
shall be required to make any representations or warranties or to
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provide any indemnities in connection therewith other than with respect to title
to the stock being conveyed. At the time of consummation of the sale, the
purchaser shall remit directly to each Investor that portion of the sale
proceeds to which each Investor is entitled by reason of its participation
therein. All costs and expenses in connection with any sales pursuant to this
Section 2.2 shall be paid for by the party that incurred such cost or otherwise
as they may have agreed. No Shares may be purchased by a purchaser from a
Stockholder or any Permitted Transferee unless the purchaser simultaneously
purchases from the Investors all of the shares that they have elected to sell
pursuant to this Section 2.2(a).
(b) Any Shares held by a Stockholder or any Permitted
Transferee that such Stockholder or Transferee desire to sell following
compliance with Section 2.2(a) may be sold to the purchaser only during the
90-day period after the expiration of the Co-Sale Notice Period and only on
terms no more favorable to such Stockholder or such Transferee than those
contained in the Co-Sale Notice. Promptly after such sale, such Stockholder or
Permitted Transferee shall notify the Investors of the consummation thereof and
shall furnish such evidence of the completion and time of completion of such
sale and of the terms thereof as may reasonably be requested by the Investors.
So long as the purchaser is neither a party, nor an affiliate or relative of a
party, to this Agreement, such purchaser shall take the Shares so Transferred
free and clear of any further restrictions of this Section 2. If, at the end of
such 90-day period, such Stockholder or Transferee has not completed the sale of
such Shares as aforesaid, all the restrictions on Transfer contained in this
Section 2 shall again be in effect with respect to such shares.
(c) In the event that any Investor or any of its
Affiliates proposes to Transfer (other than to an Affiliate who agrees to be
bound by the provisions of this Agreement) shares of capital stock of the
Company held by such Person such that such Investor or Affiliate shall hold, as
a result of such Transfer, less than ninety percent (90%) of the shares of
capital stock of the Company originally issued to such Investor under the
Purchase Agreement (on an as converted basis and as appropriately adjusted for
stock splits, stock dividends and the like), such Investor or Affiliate may only
Transfer such shares if it gives prompt written notice of such Transfer to the
other Investors and offers the other Investors the same "co-sale" rights with
respect to such shares as are set forth in paragraphs (a) and (b) of this
Section 2.2, upon similar terms and conditions as set forth in such paragraphs
(a) and (b) of this Section 2.2.
SECTION 2.3 DRAG-ALONG OBLIGATIONS.
(a) In the event that a Two Thirds Interest of the
Investors consent to selling or otherwise disposing of all or substantially all
of the assets of the Company or all or substantially all of the capital stock of
the Company to any non-Affiliate(s) of the Company or any of the Investors, or
to the Company merging with or into or consolidating with any non-Affiliate(s)
of the Company or any of the Investors (in each case, the "Buyer") in a bona
fide negotiated transaction (a "Sale"), each Investor shall be obligated to and
shall upon the written request of a Two Thirds Interest of the Investors (the
"Electing Investors"): (i) sell, Transfer
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and deliver, or cause to be sold, transferred and delivered, to the Buyer, its
shares of capital stock of the Company on the same terms and conditions
applicable to the Electing Investors, including without limitation with respect
to all forms of payments from the Buyer, the Company or any of their Affiliates;
and (ii) execute and deliver such instruments of conveyance and transfer and
take such other action, including voting such shares in favor of any Sale
proposed by the Electing Investors and executing any purchase agreements, merger
agreements, indemnity agreements, escrow agreements or related documents, as the
Electing Investors or the Buyer may reasonably require in order to carry out the
terms and provisions of this Section 2.3, all on the same terms and conditions
applicable to the Electing Investors, including without limitation with respect
to all forms of payments from the Buyer, the Company or any of their Affiliates;
provided that no Investor, other than an Electing Investor, shall be required to
be liable for any amounts in excess of its share of the transaction proceeds
from any such Sale.
(b) Not less than thirty (30) days prior to the date proposed
for the closing of any Sale, the Company shall give written notice to each
Investor, setting forth in reasonable detail the name or names of the Buyer, the
terms and conditions of the Sale, including the purchase price, and the proposed
closing date.
SECTION 2.4 ASSIGNMENT. Each Investor shall have the right to assign
its rights under this Section 2 in connection with any Transfer of shares of
capital stock of the Company, and such Transferee shall be deemed to be an
Investor for purposes hereof. Each such subsequent holder of shares of capital
stock of the Company must consent in writing to be bound by the terms and
conditions of this Agreement in order to acquire the rights granted hereunder.
ARTICLE III RIGHTS TO PURCHASE
SECTION 3.1 RIGHT TO PARTICIPATE IN CERTAIN SALES OF ADDITIONAL
SECURITIES. The Company agrees that it will not sell or issue (i) any shares of
capital stock, (ii) securities convertible into or exchangeable for capital
stock of the Company or (iii) options, warrants or rights carrying any rights to
purchase capital stock of the Company, unless the Company first submits a
written offer to each Investor and Stockholder who holds any shares of capital
stock of the Company and each of their permitted transferees holding at least
two percent (2%) of the fully-diluted capital stock of the Company
(collectively, the "Offerees") identifying the terms of the proposed sale
(including price, number or aggregate principal amount of securities and all
other material terms), and offers to each Offeree the opportunity to purchase
its Pro Rata Allotment (as hereinafter defined) of the securities (subject to
increase for over-allotment if some Offerees do not fully exercise their rights)
on terms and conditions, including price, not less favorable than those on which
the Company proposes to sell such securities to a third party or parties. Each
Offeree's "Pro Rata Allotment" of such securities shall be based on the ratio
(as determined in accordance with Section 1.3 hereof) which the Shares then
owned by it bears to all of the then issued and outstanding Shares as of the
date of such written offer. The
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Company's offer pursuant to this Section 3.1 shall remain open and irrevocable
for a period of 30 days, and the recipients of such offer shall elect to
purchase by giving written notice thereof to the Company within such 30-day
period, including therein the maximum number of Shares or other securities which
the Offeree would purchase if other Offerees do not elect to purchase, with the
rights of electing Offerees to purchase such additional shares to be based upon
the relative holdings of Shares of the electing Offerees in the case of
over-subscription. Any securities so offered which are not purchased pursuant to
such offer may be sold by the Company, but only on the terms and conditions set
forth in the initial offer, at any time within 120 days following the
termination of the above-referenced 30-day period but may not be sold to any
other person or on terms and conditions, including price, that are more
favorable to the purchaser than those set forth in such offer or after such
120-day period without renewed compliance with this Section 3.1.
Notwithstanding the foregoing, the right to purchase granted under this
Article III shall be inapplicable with respect to any (i) options to purchase
shares of Common Stock granted or to be granted pursuant to the Company's 1998
Stock Plan (as defined in the Purchase Agreement), (ii) securities issued as a
result of any stock split, stock dividend, reclassification or reorganization or
similar event with respect to the Common Stock or (iii) shares of Common Stock
issued upon conversion of the Preferred Stock or upon exercise of options
granted pursuant to the Company's 1998 Stock Plan or options to purchase shares
of Common Stock outstanding as of the date hereof.
SECTION 3.2 ASSIGNMENT OF RIGHTS. The rights of the Offerees set forth
in this Article III are transferable (subject to the minimum holding
requirements set forth in Section 3.1 above) to each Transferee of shares of
capital stock of the Company by the Offerees in connection with a Transfer of
such shares otherwise permitted hereunder to a Transferee of the capital stock
of the Company, and such Transferee shall be deemed to be an Offeree for
purposes hereof. Any Transferee that is a fund managed by or associated with a
Proxy Holder shall be deemed an "Investor" for purposes of this Article III and
shall not be subject to the minimum holding requirements set forth in Section
3.1 above. Each such subsequent holder of such shares of capital stock must
consent in writing to be bound by the terms and conditions of this Agreement in
order to acquire the rights granted hereunder.
ARTICLE IV ELECTION OF DIRECTORS
SECTION 4.1 BOARD COMPOSITION. Each Investor and each Stockholder
(including, for purposes of this Section 4.1, each Permitted Transferee) agrees
to vote all of its shares of the capital stock of the Company having voting
power (and any other shares over which it exercises voting control), to the
extent it holds such voting stock at the relevant time, in connection with the
election of Directors to elect and continue in the office as Directors nine (9)
individuals, subject to Section 4.2 below, and to elect and continue in office
as Directors the following:
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(a) for so long as each such individual owns at least
ten percent (10%) of the fully-diluted capital stock of the Company, Xxxxxxx X.
Xxxx, Xxxx Xxxxxxx and Xxx Xxxxx (the "Stockholder Nominees");
(b) as provided in Article IV of the Company's
Amended and Restated Certificate of Incorporation, for so long as the Investors
shall hold (i) shares of Preferred Stock or (ii) shares of Common Stock issued
upon conversion of such shares of Preferred Stock representing in the aggregate
at least ten percent (10%) of the fully-diluted capital stock of the Company,
one (1) individual nominated by TA Associates, Inc. on behalf of the Investors
identified as "TA Investors" on the signature pages hereto, one (1) individual
nominated by Summit Partners, LLC on behalf of the Investors identified as
"Summit Investors" on the signature pages hereto, and one (1) individual
nominated by a Two Thirds Interest of the Investors, who shall initially be
Xxxxx X. Xxxxx, Xxxxx X. Xxxxxx and one individual to be named later by the
Proxy Holders (as defined in Section 4.4 below), respectively (the "Investor
Nominees");
(c) one (1) individual who is a member of the
Company's management team (the "Management Nominee") nominated by holders of a
majority-in-interest of the then outstanding Common Stock and Preferred Stock
(on an as converted basis); and
(d) two (2) non-employee directors as defined in Rule
16b-3 promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), who are not, and have not been in the previous three years,
either an Associate (as such term is defined in Rule 12b-2 promulgated under the
Exchange Act) of, vendor (or employed by a vendor) to or person with a direct
contractual relationship with, either Proxy Holder (as defined in Section 4.4
below) or any Stockholder or any of the Stockholders' Affiliates ("Independent
Director Nominees") nominated by holders of a majority-in-interest of the then
outstanding Common Stock and Preferred Stock (on an as converted basis).
If and to the extent that any of the Stockholder Nominees holds less
than ten percent (10%) of the fully-diluted capital stock of the Company, such
individual shall no longer be entitled to be a Director of the Company and the
holders of a majority-in-interest of the then outstanding Common Stock and
Preferred Stock shall be entitled to nominate an additional Independent Director
Nominee in accordance with subparagraph (d) above. Each of the Management
Nominees and the Independent Director Nominees shall be reasonably acceptable to
a Two Thirds Interest of the Investors.
If at any time the Investors hold Common Stock representing, in the
aggregate, less than ten percent (10%) of the fully-diluted capital stock of the
Company, the Investors shall no longer be entitled to nominate the Investor
Nominees and the holders of a majority-in-interest of the then outstanding
Common Stock and Preferred Stock shall be entitled to nominate three (3)
additional Independent Director Nominees in accordance with subparagraph (d)
above.
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SECTION 4.2 REMOVAL; VACANCIES. Each Investor and each Stockholder
agrees to vote all of its shares of the capital stock of the Company, having
voting power (and any other shares over which she or it exercises voting
control), to the extent it holds such voting stock at the relevant time, for the
removal of any Director upon the request of the Persons then entitled to
nominate such Director and for the election to the Board of Directors of a
substitute designated by such party in accordance with the provisions of Section
4.1 hereof. Each Investor and each Stockholder further agrees to vote all of its
shares of the capital stock of the Company having voting power (and any other
shares over which he or it exercises voting control) in such manner as shall be
necessary or appropriate to ensure that any vacancy on the Board of Directors
occurring for any reason shall be filled only in accordance with the provisions
of this Article IV.
SECTION 4.3 COMMITTEES OF THE BOARD. The Company, the Investors and the
Stockholders agree to use their best efforts to cause the Board of Directors to
establish a Compensation Committee (which shall be delegated with exclusive
authority over all compensation and employee stock and option matters) and an
Audit Committee (which shall be charged with reviewing the Company's financial
statements and accounting practices). The Compensation and Audit Committees
shall consist of three (3) Directors, one (1) of which shall be a Stockholder
Nominee (as selected by a majority-in-interest of the Stockholders), one (1) of
which shall be an Investor Nominee (as selected by a Two Thirds Interest of the
Investors) and the other of which shall be an Independent Director Nominee
selected by both a majority-in-interest of the Stockholders and a Two Thirds
Interest of the Investors.
SECTION 4.4 IRREVOCABLE PROXY. Effective as of the date hereof, Cendant
Corporation ("Cendant"), hereby appoints TA Associates, Inc. and Summit
Partners, LLC (the "Proxy Holders") as its irrevocable proxies to act for and
vote on behalf of Cendant with respect to all of the shares of capital stock of
the Company held by Cendant in connection with voting on any matter requiring a
vote of stockholders of the Company, including, without limitation, the election
of directors, regardless of (i) whether such approval is sought at an annual or
special meeting of the Company's stockholders, or by written consent in lieu of
a meeting, or otherwise, or (ii) whether such vote is to be cast in person or by
proxy, or as otherwise permitted by law; provided that the Proxy Holders shall
have no such proxy to act for and vote on behalf of Cendant in connection with
any amendments to the terms of the Preferred Stock referred to in Section A.8(a)
of Article IV of the Amended and Restated Charter of the Company if (x) such
amendment would impose any additional obligations on Cendant to pay any amounts
or assume financial liabilities or (y) Cendant would get treated any less
favorably than any of the Investors or any of their Affiliates in connection
with such amendment. Any such action or vote to be taken by the Proxy Holders
must be taken by both Proxy Holders in order to be valid and effective.
This proxy is coupled with an interest and shall be irrevocable and
remain in effect until the earlier of (x) the closing of a Qualified Public
Offering, or (y) the date on which the Proxy
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Holders or their Affiliates cease to hold in the aggregate a majority of the
outstanding shares of Preferred Stock.
SECTION 4.5 ASSIGNMENT. Each Investor and Stockholder agrees, as a
condition to any Transfer of its or his shares of capital stock of the Company,
to cause the Transferee to agree to the provisions of this Article IV, whereupon
such Transferee shall be subject to the provisions hereof to the same extent as
the Investors and the Stockholders, as applicable, in connection with its
ownership of the shares so Transferred for purposes of this Article IV.
ARTICLE IV.A CERTAIN TRANSACTIONS
SECTION 4A.1 RESTRICTIONS ON CERTAIN AFFILIATED TRANSACTIONS AND
ARRANGEMENTS. Notwithstanding anything to the contrary contained in this
Agreement, neither Proxy Holder nor Cendant (collectively, the "Prohibited
Parties") shall, nor will it permit any of the Persons of which it holds a
majority of the voting securities ("Controlled Persons") to, (x) enter into any
contractual or other arrangement with the Company or any of its subsidiaries, or
(y) effect any transaction (including, without limitation, any transaction
involving the payment of any amounts or the delivery of any goods or services)
with the Company or any of its subsidiaries; provided that the foregoing
restrictions shall not apply to (a) this Agreement, the Purchase Agreement or
any other agreement set forth as an exhibit to the Purchase Agreement (an
"Existing Agreement") and transactions expressly contemplated thereby, or any
other agreement (a "Future Agreement") expressly contemplated and permitted
pursuant to the provisions of any Existing Agreement (as in effect on the date
hereof), such as in connection with the exercise of any "drag-along" rights
pursuant to Section 2.3 above or in connection with the exercise of any
"registration rights" under the Registration Rights Agreement, (b) arrangements
and transactions between the Company and any such Person that are on an arm's
length basis and do not include payments that exceed $500,000 in any twelve (12)
month period, (c) any arrangement or transaction which is specifically approved
in writing in advance by each of the other Prohibited Parties or (d) any
transaction in which the other Prohibited Parties are offered the opportunity to
participate in such transaction on a pro rata basis in accordance with their
relative ownership interests in the Company (e.g., such as in connection with
any Company financing or refinancing, etc.) and otherwise on terms and
conditions which are no less favorable to the other Prohibited Parties than
those extended to such Prohibited Party or any of its respective Controlled
Persons. The Company agrees that it will not enter into any transactions with
the Prohibited Parties or their Controlled Persons that are not in compliance
with this Section 4A.1.
ARTICLE V MISCELLANEOUS PROVISIONS
SECTION 5.1 SURVIVAL OF COVENANTS. Each of the parties hereto agrees
that each covenant and agreement made by it in this Agreement or in any
certificate, instrument or other document delivered pursuant to this Agreement
is material, shall be deemed to have been relied
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upon by the other parties and shall remain operative and in full force and
effect after the date hereof regardless of any investigation. This Agreement
shall not be construed so as to confer any right or benefit upon any Person
other than the parties hereto and their respective successors and permitted
assigns to the extent contemplated herein.
SECTION 5.2 LEGEND ON SECURITIES. The Company, the Investors and the
Stockholders acknowledge and agree that the following legend shall be typed on
each certificate evidencing any of the securities issued hereunder held at any
time by any of the Investors, Stockholders or their Permitted Transferees:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES OR BLUE
SKY LAWS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE
ASSIGNED EXCEPT (1) PURSUANT TO A REGISTRATION STATEMENT WITH RESPECT TO SUCH
SECURITIES WHICH IS EFFECTIVE UNDER THE ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM REGISTRATION UNDER THE ACT RELATING TO THE DISPOSITION OF
SECURITIES AND (2) IN ACCORDANCE WITH APPLICABLE STATE SECURITIES AND BLUE SKY
LAWS.
THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE PROVISIONS OF A
STOCKHOLDERS AGREEMENT DATED AS OF AUGUST __, 1998, INCLUDING THEREIN CERTAIN
RESTRICTIONS ON TRANSFER. A COMPLETE AND CORRECT COPY OF THIS AGREEMENT IS
AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF THE COMPANY AND WILL BE
FURNISHED UPON WRITTEN REQUEST AND WITHOUT CHARGE.
SECTION 5.3 AMENDMENT AND WAIVER.
(a) Any party may waive any provision hereof intended for its benefit
in writing. No failure or delay on the part of any party hereto in exercising
any right, power or remedy hereunder shall operate as a waiver thereof. The
remedies provided for herein are cumulative and are not exclusive of any
remedies that may be available to any party hereto at law or in equity or
otherwise.
(b) This Agreement may be amended with the prior written consent of (a)
the Company, (b) each Stockholder who holds at least five percent (5%) of the
Common Stock (on a fully diluted basis) of the Company (each, a "5% Holder") and
(c) a Two Thirds Interest of the Investors; provided, however, that any such
amendment shall also require the approval of Cendant unless (x) such amendment
does not impose any additional obligations on Cendant to pay any amounts or
assume financial liabilities and (y) in connection with such amendment Cendant
would not get treated any less favorably than any of the other Investors or any
of their
11
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respective Affiliates; and provided further that any amendment to Sections 2.2
(to the extent such amendments would effect the rights of Cendant set forth in
Section 2.2(c)), 2.3, 4.4, 4A.1 or 5.3 hereof shall in any event also require
the approval of Cendant. Any amendment made by the 5% Holders and the requisite
Investors as provided in the preceding sentence shall be binding on all
Stockholders and Investors, respectively, and no Stockholder or Investor shall
have any cause of action against any other Person for any action taken by such
Person in reliance upon such consent. Except as set forth herein, all actions by
the Company hereunder shall be taken by or upon the direction of a majority of
the members of the Board of Directors of the Company.
SECTION 5.4 NOTICES. All notices and other communications provided for
herein shall be in writing and shall be deemed to have been duly given,
delivered and received (a) if delivered personally or (b) if sent by facsimile,
registered or certified mail (return receipt requested) postage prepaid, or by
courier guaranteeing next day delivery, in each case to the party to whom it is
directed at the following addresses (or at such other address for any party as
shall be specified by notice given in accordance with the provisions hereof,
provided that notices of a change of address shall be effective only upon
receipt thereof). Notices delivered personally shall be effective on the day so
delivered, notices sent by registered or certified mail shall be effective three
days after mailing, notices sent by facsimile shall be effective when receipt is
acknowledged, and notices sent by courier guaranteeing next day delivery shall
be effective on the earlier of the second business day after timely delivery to
the courier or the day of actual delivery by the courier:
If to the Company: Private Business, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx
Telecopy No.: (000) 000-0000
with a copy to: Xxxxxxx Xxxxxx Xxxx Xxxxxxx & Manner, P.C.
0000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxx X. Xxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
If to the Investors: TA Associates, Inc.
Xxxx Xxxxxx Xxxxx, Xxxxx 0000
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
and
Summit Partners
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000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx
Telecopy No.: (000) 000-0000
with a copy to: Xxxxxxx, Procter & Xxxx XXX
Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxx X. XxXxxxxx, P.C.
Telecopy No.: (000) 000-0000
and Cendant Corporation
0 Xxxxxx Xxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxx
Telecopy No.: (000) 000-0000
SECTION 5.5 HEADINGS. The Article and Section headings used or
contained in this Agreement are for convenience of reference only and shall not
affect the construction of this Agreement.
SECTION 5.6 COUNTERPARTS. This Agreement may be executed in one or more
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which together
shall be deemed to constitute one and the same agreement.
SECTION 5.7 REMEDIES; SEVERABILITY. It is specifically understood and
agreed that any breach of the provisions of this Agreement by any Person subject
hereto will result in irreparable injury to the other parties hereto, that the
remedy at law alone will be an inadequate remedy for such breach, and that, in
addition to any other legal or equitable remedies which they may have, such
other parties may enforce their respective rights by actions for specific
performance (to the extent permitted by law) and the Company may refuse to
recognize any unauthorized Transferee as one of its Stockholders for any
purpose, including, without limitation, for purposes of dividend and voting
rights, until the relevant party or parties have complied with all applicable
provisions of this Agreement.
In the event that any one or more of the provisions contained herein,
or the application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be in any way impaired thereby, it being
intended that all of the rights and privileges of the parties hereto shall be
enforceable to the fullest extent permitted by law.
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SECTION 5.8 ENTIRE AGREEMENT. This Agreement, together with the
Purchase Agreement and any other agreements specifically contemplated hereby and
thereby, is intended by the parties as a final expression of their agreement and
intended to be complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein and therein. This Agreement and the Purchase Agreement and other
agreements specifically contemplated hereby and thereby (including the exhibits
hereto and thereto) supersede all prior agreements and understandings between
the parties with respect to such subject matter.
SECTION 5.9 ADJUSTMENTS. All references to share prices and amounts
herein shall be equitably adjusted to reflect stock splits, stock dividends,
recapitalizations and similar changes affecting the capital stock of the
Company.
SECTION 5.10 LAW GOVERNING. This Agreement shall be construed and
enforced in accordance with and governed by the laws of the State of Tennessee
(without giving effect to principles of conflicts of law). Each party also
waives trial by jury in any action relating to this Agreement.
SECTION 5.11 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the respective successors and permitted assigns
of the parties hereto as contemplated herein, and any successor to the Company
by way of merger or otherwise shall specifically agree to be bound by the terms
hereof as a condition of such successor. Subject to the minimum holding
requirements set forth in Section 3.1 above, the rights of the Investors
hereunder shall be assignable to Transferees of the shares of capital stock of
the Company held by the Investors. This Agreement may not be assigned by the
Stockholders except as provided herein without the prior written consent of a
Two Thirds Interest of the Investors, and without such prior written consent any
attempted Transfer shall be null and void.
SECTION 5.12 DISPUTE RESOLUTION. Except as provided below, any dispute
arising out of or relating to this Agreement or the breach, termination or
validity hereof shall be finally settled by binding arbitration conducted
expeditiously in accordance with the J.A.M.S./Endispute Comprehensive
Arbitration Rules and Procedures (the "J.A.M.S. Rules"). The arbitration shall
be governed by the United States Arbitration Act, 9 U.S.C. ss. ss.1-16, and
judgment upon the award rendered by the arbitrators may be entered by any court
having jurisdiction thereof. The place of arbitration shall be Baltimore,
Maryland.
Such proceedings shall be administered by the neutral arbitrator in
accordance with the J.A.M.S. Rules as he/she deems appropriate, however, such
proceedings shall be guided by the following agreed upon procedures:
(a) mandatory exchange of all relevant documents, to be
accomplished within forty-five (45) days of the
initiation of the procedure;
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17
(b) no other discovery;
(c) hearings before the neutral arbitrator which shall
consist of a summary presentation by each side of not
more than three (3) hours; such hearings to take
place on one or two days at a maximum; and
(d) decision to be rendered not more than ten (10) days
following such hearings.
Notwithstanding anything to the contrary contained herein, the
provisions of this Section 5.12 shall not apply with regard to any equitable
remedies to which any party may be entitled hereunder.
Each of the parties hereto (a) hereby irrevocably submits to the
jurisdiction of any United States District Court of competent jurisdiction for
the purpose of enforcing the award or decision in any such proceeding, (b)
hereby waives, and agrees not to assert, by way of motion, as a defense, or
otherwise, in any such suit, action or proceeding, any claim that it is not
subject personally to the jurisdiction of the above-named courts, that its
property is exempt or immune from attachment or execution (except as protected
by applicable law), that the suit, action or proceeding is brought in an
inconvenient forum, that the venue of the suit, action or proceeding is improper
or that this Agreement or the subject matter hereof may not be enforced in or by
such court, and hereby waives and agrees not to seek any review by any court of
any other jurisdiction which may be called upon to grant an enforcement of the
judgment of any such court. Each of the parties hereto hereby consents to
service of process by registered mail at the address to which notices are to be
given. Each of the parties hereto agrees that its or his submission to
jurisdiction and its or his consent to service of process by mail is made for
the express benefit of the other parties hereto. Final judgment against any
party hereto in any such action, suit or proceeding may be enforced in other
jurisdictions by suit, action or proceeding on the judgment, or in any other
manner provided by or pursuant to the laws of such other jurisdiction.
SECTION 5.13 TERM. This Agreement shall remain in effect until the
earlier of (i) immediately prior to the closing of a Qualified Public Offering
and shall not apply with respect to such Qualified Public Offering or (ii) such
time as no Investor or its permitted assigns shall hold any shares of capital
stock of the Company.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Stockholders
Agreement to be duly executed as of the date first set forth above.
THE COMPANY:
PRIVATE BUSINESS, INC.
By:
---------------------------------------
Name: Xxxxxxx X. Xxxx, Xx.
Title: Chairman
[SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT]
19
FOUNDING STOCKHOLDERS:
THE XXXXXXX X. XXXX, XX. ANNUITY TRUST -
1997
By:
---------------------------------------
Xxxxxxx X. Xxxx, Xx., Trustee
--------------------------------------------
Xxxxxxx X. Xxxx, individually
--------------------------------------------
THE XXXXXXX X. XXXXXXX ANNUITY TRUST -
1997
By:
---------------------------------------
Xxxxxxx X. Xxxxxxx, Trustee
--------------------------------------------
Xxxxxxx X. Xxxxxxx, individually
THE XXXX X. XXXXXXX ANNUITY TRUST - 1997
By:
---------------------------------------
Xxxx X. Xxxxxxx, Trustee
--------------------------------------------
Xxxx X. Xxxxxxx, individually
--------------------------------------------
Xxx Xxxxx, individually
[SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT]
20
--------------------------------------------
Xxxxxxx X. Xxxxx, individually
--------------------------------------------
Xxxxx X. Xxxxxxxx, individually
[SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT]
21
INVESTORS:
TA/ADVENT VIII, L.P.
By: TA Associates VIII, LLC
Its: General Partner
By: TA Associates, Inc.
Its: Manager
By:
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Managing Director
ADVENT ATLANTIC AND PACIFIC III, L.P.
By: TA Associates AAP III Partners, L.P.
Its: General Partner
By: TA Associates, Inc.
Its: General Partner
By:
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Managing Director
TA INVESTORS LLC
By: TA Associates, Inc.
Its: Manager
By:
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Managing Director
[SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT]
22
TA EXECUTIVES LLC
By: TA Associates, Inc.
Its: Manager
By:
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Managing Director
[SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT]
23
SUMMIT VENTURES V, L.P.
By: Summit Partners V, L.P.
Its: General Partner
By: Summit Partners, LLC
Its: General Partner
By:
---------------------------------------
Name: Xxxxx X. Xxxxx
Title: Member
SUMMIT V ADVISORS FUND (QP), L.P.
By: Summit Partners V, L.P.
Its: General Partner
By: Summit Partners, LLC
Its: General Partner
By:
---------------------------------------
Name: Xxxxx X. Xxxxx
Title: Member
SUMMIT V ADVISORS FUND, L.P.
By: Summit Partners V, L.P.
Its: General Partner
By: Summit Partners, LLC
Its: General Partner
By:
---------------------------------------
Name: Xxxxx X. Xxxxx
Title: Member
[SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT]
24
SUMMIT INVESTORS III, L.P.
By:
---------------------------------------
Name: Xxxxx X. Xxxxx
Title: General Partner
SUMMIT V COMPANION FUND, L.P.
By: Summit Partners V, L.P.
Its: General Partner
By: Summit Partners, LLC
Its: General Partner
By:
---------------------------------------
Name: Xxxxx X. Xxxxx
Title: Member
[SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT]
25
CENDANT CORPORATION
By:
---------------------------------------
Name: Xxxxxx X. Xxxx
Title: Executive Vice President
[SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT]
26
BT INVESTMENT PARTNERS, INC.
By:
---------------------------------------
Name: Xxxxxxxxx Xxxxxxxx-Xxxxxx
Title: Principal
[SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT]
27
THE XXXX XXXX XXXXXXX TRUST
By:
---------------------------------------
Name: W. Xxxxxxx Xxxxxx, III
Title: Trustee
--------------------------------------------
W. Xxxxxxx Xxxxxx, III
THE XXXX AND XXXXXX XXXXXXX JOINT
REVOCABLE TRUST
By:
---------------------------------------
Name:
Title: Trustee
XXXXX XXXXXX XXXXXXXX MANAGEMENT
TRUST
By:
---------------------------------------
Name: Xxxxx X. Xxxx
Title: Trustee
[SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT]
28
SUNAPEE SECURITIES, INC.
By:
---------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Treasurer
SQUAM LAKE INVESTORS III, L.P.
By:
---------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Treasurer
[SIGNATURE PAGE TO STOCKHOLDERS XXXXXXXXX]
00
0000 XXX FUND, LLC
By:
---------------------------------------
Name: H. Xxxxx Xxxxxx
Title: Managing Member
GPH PB FUND, LLC
By:
---------------------------------------
Name: Xxxx X. XxXxxxxx
Title: Managing Member
[SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT]
30
EXHIBIT A
FORM OF JOINDER AGREEMENT
The undersigned hereby agrees, effective as of the date hereof, to
become a party to that certain Stockholders Agreement (the "Agreement") dated as
of August __, 1998 by and among Private Business, Inc. (the "Company") and the
parties named therein and for all purposes of the Agreement, the undersigned
shall be included within the term "Stockholder" (as defined in the Agreement).
The address and facsimile number to which notices may be sent to the undersigned
is as follows:
---------------------------------------------------------------------------
Facsimile No.____________________.
---------------------------------------
Name:
[SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT]
